News | November 3, 2020

Research Affiliates Introduces RAFI Multi-Factor Climate Transition Strategy


RAFI Indices, LLC, a sister company of Research Affiliates, LLC, a global leader in smart beta and asset allocation, announces today the launch of the RAFITM Multi-Factor Climate Transition strategy.

RAFI Multi-Factor Climate Transition offers diversified exposures to the value, low volatility, quality, and momentum factors, while integrating objectives related to greenhouse gas emissions reductions and a transition to a low-carbon economy. The index strategy is designed for investors who wish to promote responsible environmental management with their investment choices as well as to preserve the potential for long-horizon outperformance.

“At Research Affiliates, we seek to offer index strategies that meet investor preferences and to deliver superior expected returns over a full investment cycle. Our Climate Transition index strategies provide the market with an excellent choice for those who want their portfolios to reflect a commitment to environmental sustainability,” asserts Katrina Sherrerd, PhD, CFA, President and Chief Executive Officer, Research Affiliates.

RAFI Multi-Factor Climate Transition is intended to comply with the requirements for the Climate Transition Benchmark as specified by the EU Commission’s Technical Expert Group on Sustainable Finance’s final report on climate benchmarks and ESG disclosures published in September 2019.

“Carbon emissions data are critical to investors’ increasingly important role in helping combat climate change. Our research finds that reported data are at least 2.4 times more efficient in identifying the worst emitters compared to the estimated data. One of the objectives of the RAFI Multi-Factor Climate Transition Index is to promote incentives for companies to start reporting their emissions,” explains Vitali Kalesnik, Partner, Director of Research for Europe, Research Affiliates Global Advisors (Europe).

According to Ari Polychronopoulos, CFA, Partner, Head of ESG, Research Affiliates: “In recent years we have created various index strategies that incorporate ESG metrics into certain index methodologies. We are pleased to provide this latest offering to investors.”

Indices based on the RAFI Multi-Factor Climate Transition strategy will be constructed, published, and licensed through RAFI Indices, LLC.

About RAFI Indices

RAFI Indices, LLC, is a California limited liability company established in 2016, which is a wholly owned subsidiary of Research Affiliates Global Holdings, LLC. RAFI Indices, LLC, constructs, publishes, and licenses various indices and does not offer or provide investment advice or offer or sell any securities, commodities, or derivative instruments or products. The RAFI trademark is used under license by RAFI Indices, LLC. The RAFI Indices, LLC, corporate name and all related logos are the exclusive intellectual property of RAFI Indices, LLC.

Indices based on the RAFI Diversity & Governance strategy will be constructed, published, and licensed through RAFI Indices, LLC, a sister company of Research Affiliates.

About Research Affiliates

Research Affiliates, LLC, is a global leader in smart beta and asset allocation. Founded in 2002 and based in Newport Beach, California, Research Affiliates is dedicated to creating value for investors and seeking to have a profound impact on the global investment community through its insights and products. The firm’s investment strategies are built on a strong research base and are led by Rob Arnott and Chris Brightman. Research Affiliates delivers solutions in partnership with some of the world’s leading financial institutions through their offerings of mutual funds, ETFs, separately managed accounts, and/or commingled accounts. As of September 30, 2020, about $145 billion in assets are managed worldwide using investment strategies developed by Research Affiliates.

Twitter: @ra_insights

Neither Research Affiliates, LLC, nor its related entities provide investment advice outside of the United States, Ireland, Australia, and Canada, and do not offer or sell any securities, commodities, or derivative instruments or products. Any such business may only be conducted through registered or licensed entities and individuals permitted to do so within the respective jurisdiction and only in conjunction with the legally required disclosure documents and subject to all legally required regulatory filings and/or exemptions.

The trademarks Fundamental Index and RAFI, and the Research Affiliates trademark and corporate name and all related logos, are the exclusive intellectual property of Research Affiliates, LLC, and in some cases are registered trademarks in the United States and other countries. Various features of the Fundamental Index methodology, including an accounting data–based noncapitalization data–processing system and method for creating and weighting an index of securities, are protected by various patents, and patent-pending intellectual property of Research Affiliates, LLC. (See all applicable US Patents, Patent Publications, Patent Pending intellectual property and protected trademarks located at, which are fully incorporated herein.) Any use of these trademarks, logos, patented, or patent-pending methodologies without the prior written permission of Research Affiliates, LLC, is expressly prohibited. Research Affiliates, LLC, reserves the right to take any and all necessary action to preserve all of its rights, title, and interest in, and to, these.

Research Affiliates, LLC relies on an exemption from the requirement to hold an Australian financial services license by operation of ASIC Class Order 03/1100.

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